Yahoo Spits Out Poison PillBy: Doug Caverly - December 11, 2008
As part of its plan to make an acquisition extremely unpalatable to Microsoft, Yahoo adopted a poison pill severance plan six months ago. Now, for the sake of satisfying some shareholders who sued it, Yahoo has made it slightly easier for a new owner to fire employees.
Mind you, Yahoo’s not trying to help Microsoft out. In an internal email reprinted by Henry Blodget, the company told employees, "The amendments to the plans were agreed upon in negotiations with counsel for the plaintiffs to settle the litigation and not in anticipation of any specific transaction that the Company may consider now or in the future."
And, especially as this comes in the wake of 1,500 layoffs, the amendments probably aren’t going to do corporate morale much good.
But the end result is that the move will "[s]horten the period following a change in control during which the termination of employment would trigger an employee’s eligibility for severance benefits under the severance plans from two years to one year," "[c]larify the circumstances under which an employee may terminate his or her employment for ‘good reason,’" and "[p]rovide that if a potential change in control transaction is pending, Yahoo!’s Board of Directors . . . may terminate or amend the severance plans in connection with a negotiated change in control transaction."
Yahoo could even sell its search business without triggering the plan.
So the messy Yahoo-Microsoft story continues to grow in size and length.